The Chief Executive of the Ghana Association of Banks (GAB), John Awuah, is projecting a reduction in interest rates on loans from August 6, 2025.
According to him, this is due to the 300 basis points cut in the policy rate by the Bank of Ghana to 25%.
Mr. Awuah disclosed this in an interview with Joy Business in response to concerns that commercial banks often delay in adjusting their lending rates.
He, however, rejected the claim, insisting that “obviously the policy rate carries about 40% weight in the variables that determine the Ghana Reference Rate in the country”.
“So by next Wednesday [August 7, 2025], the commercial banks are expected to publish the new Ghana Reference Rate for August 2025 and we should see quite a good reduction in the Ghana Reference Rate,” Mr. Awuah disclosed
The Ghana Reference Rate
The Bank of Ghana and the Ghana Association of Banks in 2017 launched the Ghana Reference Rate, which was described as a new credit rate to serve as a guide in the setting of interest rates on loans by banks and other financial institutions in the country. The maiden rate was then pegged at 16.82% for April 2017.
According to the Bank of Ghana the Ghana Reference Rate (GRR) was expected to help introduced transparency in the setting of lending rates in the country.
The Ghana Reference Rate (GRR) is an outcome of an extensive consultation between the Bank of Ghana and the Ghana Association of Banks to review the exiting Base rate model and develop a new framework for base rate determination .
The GRR influences the interest rates of all financial institutions in the country, and it guides the setting of interest rates on all financial products.
Impact on Loan
There have always been debates about the impact of the policy rate cut on the cost of credit in the country.
Mr. Awuah explained that if the loan was negotiated at a variable rate, then it is likely that the interest rate on a loan will be affected.
He also went ahead to explain that for those who are yet to negotiate a new facility, they are likely to benefit fully from this policy rate cut.
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